The present state of the Union, upon which it is customary for the President
to report to the Congress under the provisions of the Constitution, is
such that it may be regarded with encouragement and satisfaction by every
American. Our country is almost unique in its ability to discharge fully
and promptly all its obligations at home and abroad, and provide for all
its inhabitants an increase in material resources, in intellectual vigor
and in moral power. The Nation holds a position unsurpassed in all former
human experience. This does not mean that we do not have any problems.
It is elementary that the increasing breadth of our experience necessarily
increases the problems of our national life. But it does mean that if all
will but apply ourselves industriously and honestly, we have ample powers
with which to meet our problems and provide for I heir speedy solution.
I do not profess that we can secure an era of perfection in human existence,
but we can provide an era of peace and prosperity, attended with freedom
and justice and made more and more satisfying by the ministrations of the
charities and humanities of life.

Our domestic problems are for the most part economic. We have our enormous
debt to pay, and we are paying it. We have the high cost of government
to diminish, and we are diminishing it. We have a heavy burden of taxation
to reduce, and we are reducing it. But while remarkable progress has been
made in these directions, the work is yet far from accomplished. We still
owe over $21,000,000,000, the cost of the National Government is still
about $3,500,000,000, and the national taxes still amount to about $27
for each one of our inhabitants. There yet exists this enormous field for
the application of economy.

In my opinion the Government can do more to remedy the economic ills
of the people by a system of rigid economy in public expenditure than can
be accomplished through any other action. The costs of our national and
local governments combined now stand at a sum close to $100 for each inhabitant
of the land. A little less than one-third of this is represented by national
expenditure, and a little more than two-thirds by local expenditure. It
is an ominous fact that only the National Government is reducing its debt.
Others are increasing theirs at about $1,000,000,000 each year. The depression
that overtook business, the disaster experienced in agriculture, the lack
of employment and the terrific shrinkage in all values which our country
experienced in a most acute form in 1920, resulted in no small measure
from the prohibitive taxes which were then levied on all productive effort.
The establishment of a system of drastic economy in public expenditure,
which has enabled us to pay off about one-fifth of the national debt since
1919, and almost cut in two the national tax burden since 1921, has been
one of the main causes in reestablishing a prosperity which has come to
include within its benefits almost every one of our inhabitants. Economy
reaches everywhere. It carries a blessing to everybody.

The fallacy of the claim that the costs of government are borne by the
rich and those who make a direct contribution to the National Treasury
can not be too often exposed. No system has been devised, I do not think
any system could be devised, under which any person living in this country
could escape being affected by the cost of our government. It has a direct
effect both upon the rate and the purchasing power of wages. It is felt
in the price of those prime necessities of existence, food, clothing, fuel
and shelter. It would appear to be elementary that the more the Government
expends the more it must require every producer to contribute out of his
production to the Public Treasury, and the less he will have for his own
benefit. The continuing costs of public administration can be met in only
one way -- by the work of the people. The higher they become, the more
the people must work for the Government. The less they are, the more the
people can work for themselves.

The present estimated margin between public receipts and expenditures
for this fiscal year is very small. Perhaps the most important work that
this session of the Congress can do is to continue a policy of economy
and further reduce the cost of government, in order that we may have a
reduction of taxes for the next fiscal year. Nothing is more likely to
produce that public confidence which is the forerunner and the mainstay
of prosperity, encourage and enlarge business opportunity with ample opportunity
for employment at good wages, provide a larger market for agricultural
products, and put our country in a stronger position to be able to meet
the world competition in trade, than a continuing policy of economy. Of
course necessary costs must be met, proper functions of the Government
performed, and constant investments for capital account and reproductive
effort must be carried on by our various departments. But the people must
know that their Government is placing upon them no unnecessary burden.

TAXES

Everyone desires a reduction of taxes, and there is a great preponderance
of sentiment in favor of taxation reform. When I approved the present tax
law, I stated publicly that I did so in spite of certain provisions which
I believed unwise and harmful. One of the most glaring of these was the
making public of the amounts assessed against different income-tax payers.
Although that damage has now been done, I believe its continuation to be
detrimental To the public welfare and bound to decrease public revenues,
so that it ought to be repealed.

Anybody can reduce taxes, but it is not so easy to stand in the gap
and resist the passage of increasing appropriation bills which would make
tax reduction impossible. It will be very easy to measure the strength
of the attachment to reduced taxation by the power with which increased
appropriations are resisted. If at the close of the present session the
Congress has kept within the budget which I propose to present, it will
then be possible to have a moderate amount of tax reduction and all the
tax reform that the Congress may wish for during the next fiscal year.
The country is now feeling the direct stimulus which came from the passage
of the last revenue bill, and under the assurance of a reasonable system
of taxation there is every prospect of an era of prosperity of unprecedented
proportions. But it would be idle to expect any such results unless business
can continue free from excess profits taxation and be accorded a system
of surtaxes at rates which have for their object not the punishment of
success or the discouragement of business, but the production of the greatest
amount of revenue from large incomes. I am convinced that the larger incomes
of the country would actually yield more revenue to the Government if the
basis of taxation were scientifically revised downward. Moreover the effect
of the present method of this taxation is to increase the cost of interest.
on productive enterprise and to increase the burden of rent. It is altogether
likely that such reduction would so encourage and stimulate investment
that it would firmly establish our country in the economic leadership of
the world.

WATERWAYS

Meantime our internal development should go on. Provision should be
made for flood control of such rivers as the Mississippi and the Colorado,
and for the opening up of our inland waterways to commerce. Consideration
is due to the project of better navigation from the Great Lakes to the
Gulf. Every effort is being made to promote an agreement with Canada to
build the, St. Lawrence waterway. There are pending before the Congress
bills for further development of the Mississippi Basin, for the taking
over of the Cape Cod Canal in accordance with a moral obligation which
seems to have been incurred during the war, and for the improvement of
harbors on both the Pacific and the Atlantic coasts. While this last should
be divested of some of its projects and we must proceed slowly, these bills
in general have my approval. Such works are productive of wealth and in
the long run tend to a reduction of the tax burden.

RECLAMATION

Our country has a well defined policy of reclamation established under
statutory authority. This policy should be continued and made a self-sustaining
activity administered in a manner that will meet local requirements and
bring our and lands into a profitable state of cultivation as fast as there
is a market for their products. Legislation is pending based on the report
of the Fact Finding Commission for the proper relief of those needing extension
of time in which to meet their payments on irrigated land, and for additional
amendments and reforms of our reclamation laws, which are all exceedingly
important and should be enacted at once.

No more important development has taken place in the last year than
the beginning of a restoration of agriculture to a prosperous condition.
We must permit no division of classes in this country, with one occupation
striving to secure advantage over another. Each must proceed under open
opportunities and with a fair prospect of economic equality. The Government
can not successfully insure prosperity or fix prices by legislative fiat.
Every business has its risk and its times of depression. It is well known
that in the long run there will be a more even prosperity and a more satisfactory
range of prices under the natural working out of economic laws than when
the Government undertakes the artificial support of markets and industries.
Still we can so order our affairs, so protect our own people from foreign
competition, so arrange our national finances, so administer our monetary
system, so provide for the extension of credits, so improve methods of
distribution, as to provide a better working machinery for the transaction
of the business of the Nation with the least possible friction and loss.
The Government has been constantly increasing its efforts in these directions
for the relief and permanent establishment of agriculture on a sound and
equal basis with other business.

It is estimated that the value of the crops for this harvest year may
reach $13,000,000,000, which is an increase of over $3,000,000,000 in three
years. It compares with $7,100,000,000 in 1913, arid if we make deduction
from the figures of 1924 for the comparatively decreased value of the dollar,
the yield this year still exceeds 1913 in purchasing power by over $1,000,000,000,
and in this interval there has been no increase in the number of farmers.
Mostly by his own effort the farmer has decreased the cost of production.
A marked increase in the price of his products and some decrease in the
price of his supplies has brought him about to a parity with the rest of
the Nation. The crop area of this season is estimated at 370,000,000 acres,
which is a decline of 3,000,000 acres from last year, and 6,000,000 acres
from 1919. This has been a normal and natural application of economic laws,
which has placed agriculture on a foundation which is undeniably sound
and beginning to be satisfactory.

A decrease in the world supply of wheat has resulted in a very large
increase in the price of that commodity. The position of all agricultural
products indicates a better balanced supply, but we can not yet conclude
that agriculture is recovered from the effects of the war period or that
it is permanently on a prosperous basis. The cattle industry has not yet
recovered and in some sections has been suffering from dry weather. Every
effort must be made both by Government activity and by private agencies
to restore and maintain agriculture to a complete normal relationship with
other industries.

It was on account of past depression, and in spite of present more encouraging
conditions, that I have assembled an Agricultural Conference made up of
those who are representative of this great industry in both its operating
and economic sides. Everyone knows that the great need of the farmers is
markets. The country is not suffering on the side of production. Almost
the entire difficulty is on the side of distribution. This reaches back,
of course, to unit costs and diversification, and many allied subjects.
It is exceedingly intricate, for our domestic and foreign trade, transportation
and banking, and in fact our entire economic system, are closely related
to it. In time for action at this session, I hope to report to the Congress
such legislative remedies as the conference may recommend. An appropriation
should be made to defray their necessary expenses.

MUSCLE SHOALS

The production of nitrogen for plant food in peace and explosives in
war is more and more important. It is one of the chief sustaining elements
of life. It is estimated that soil exhaustion each year is represented
by about 9,000,000 tons and replenishment by 5,450,000 tons. The deficit
of 3,550,000 tons is reported to represent the impairment of 118,000,000
acres of farm lands each year.

To meet these necessities the Government has been developing a water
power project at Muscle Shoals to be equipped to produce nitrogen for explosives
and fertilizer. It is my opinion that the support of agriculture is the
chief problem to consider in connection with this property. It could by
no means supply the present needs for nitrogen, but it would help and its
development would encourage bringing other water powers into like use.

Several offers have been made for the purchase of this property. Probably
none of them represent final terms. Much costly experimentation is necessary
to produce commercial nitrogen. For that reason it is a field better suited
to private enterprise than to Government operation. I should favor a sale
of this property, or long-time lease, tinder rigid guaranties of commercial
nitrogen production at reasonable prices for agricultural use. There would
be a surplus of power for many years over any possibility of its application
to a developing manufacture of nitrogen. It may be found advantageous to
dispose of the right to surplus power separately with such reservations
as will allow its gradual withdrawal and application to nitrogen manufacture.
A subcommittee of the Committees on Agriculture should investigate this
field and negotiate with prospective purchasers. If no advantageous offer
be made, the development should continue and the plant should be dedicated
primarily to the production of materials for the fertilization of the soil.

RAILWAYS

The railways during the past year have made still further progress in
recuperation from the war, with large rains in efficiency and ability expeditiously
to handle the traffic of the country. We have now passed through several
periods of peak traffic without the car shortages which so frequently in
the past have brought havoc to our agriculture and industries. The condition
of many of our great freight terminals is still one of difficulty and results
in imposing, large costs on the public for inward-bound freight, and on
the railways for outward-bound freight. Owing to the growth of our large
cities and the great increase in the volume of traffic, particularly in
perishables, the problem is not only difficult of solution, but in some
cases not wholly solvable by railway action alone.

In my message last year I emphasized the necessity for further legislation
with a view to expediting the consolidation of our rail ways into larger
systems. The principle of Government control of rates and profits, now
thoroughly imbedded in our governmental attitude toward natural monopolies
such as the railways, at once eliminates the need of competition by small
units as a method of rate adjustment. Competition must be preserved as
a stimulus to service , but this will exist and can be increased tinder
enlarged systems. Consequently the consolidation of the railways into larger
units for the purpose of securing the substantial values to the public
which will come from larger operation has been the logical conclusion of
Congress in its previous enactments, and is also supported by the best
opinion in the country. Such consolidation will assure not only a greater
element of competition as to service, but it will afford economy in operation,
greater stability in railway earnings, and more economical financing. It
opens large possibilities of better equalization of rates between different
classes of traffic so as to relieve undue burdens upon agricultural products
and raw materials generally, which are now not possible without ruin to
small units owing to the lack of diversity of traffic. It would also tend
to equalize earnings in such fashion as to reduce the importance of section
15A, at which criticism, often misapplied, has been directed. A smaller
number of units would offer less difficulties in labor adjustments and
would contribute much to the, solution of terminal difficulties.

The consolidations need to be carried out with due regard to public
interest and to the rights and established life of various communities
in our country. It does not seem to me necessary that we endeavor to anticipate
any final plan or adhere to an artificial and unchangeable project which
shall stipulate a fixed number of systems, but rather we ought to approach
the problem with such a latitude of action that it can be worked out step
by step in accordance with a comprehensive consideration of public interest.
Whether the number of ultimate systems shall be more or less seems to me
can only be determined by time and actual experience in the development
of such consolidations.

Those portions of the present law contemplating consolidations ore not,
sufficiently effective in producing expeditious action and need amplification
of the authority of the Interstate Commerce Commission, particularly in
affording a period for voluntary proposals to the commission and in supplying
Government pressure to secure action after the expiration of such a period.

There are other proposals before Congress for amending the transportation
acts. One of these contemplates a revision of the method of valuation for
rate-making purposes to be followed by a renewed valuation of the railways.
The valuations instituted by the Interstate Commerce Commission 10 years
ago have not yet been completed. They have cost the Government an enormous
sum, and they have imposed great expenditure upon the railways, most of
which has in effect come out of the public in increased rates. This work
should not be abandoned or supplanted until its results are known and can
be considered.

Another matter before the Congress is legislation affecting the labor
sections of the transportation act. Much criticism has been directed at
the workings of this section and experience has shown that some useful
amendment could be made to these provisions.

It would be helpful if a plan could be adopted which, while retaining
the practice of systematic collective bargaining with conciliation voluntary
arbitration of labor differences, could also provide simplicity in relations
and more direct local responsibility of employees and managers. But such
legislation will not meet the requirements of the situation unless it recognizes
the principle that t e public has a right to the uninterrupted service
of transportation, and therefore a right to be heard when there is danger
that the Nation may suffer great injury through the interruption of operations
because of labor disputes. If these elements are not comprehended in proposed
legislation, it would be better to gain further experience with the present
organization for dealing with these questions before undertaking a change.

SHIPPING BOARD

The form of the organization of the Shipping Board was based originally
on its functions as a semi judicial body in regulation of rates. During
the war it was loaded with enormous administrative duties. It has been
demonstrated time and again that this form of organization results in indecision,
division of opinion and administrative functions, which make a wholly inadequate
foundation for the conduct of a great business enterprise. The first principle
in securing the objective set out by Congress in building up the American
merchant marine upon the great trade routes and subsequently disposing
of it into private operation can not proceed with effectiveness until the
entire functions of the board are reorganized. The immediate requirement
is to transfer into the Emergency Fleet, Corporation the whole responsibility
of operation of the fleet and other property, leaving to the Shipping Board
solely the duty of determining certain major policies which require deliberative
action.

The procedure under section 28 of the merchant marine act has created
great difficulty and threatened friction during the past 12 months. Its
attempted application developed not only great opposition from exporters,
particularly as to burdens that may be imposed upon agricultural products,
but also great anxiety in the different seaports as to the effect upon
their relative rate structures. This trouble will certainly recur if action
is attempted under this section. It is uncertain in some of its terms and
of great difficulty in interpretation.

It is my belief that action under this section should be suspended until
the Congress can reconsider the entire question in the light of the experience
that has been developed since its enactment.

NATIONAL ELECTIONS

Nothing is so fundamental to the integrity of a republican form of government
as honesty in all that relates to the conduct of elections. I am of the
opinion that the national laws governing the choice of members of the Congress
should be extended to include appropriate representation of the respective
parties at the ballot box ant equality of representation on the various
registration boards, wherever they exist.

THE JUDICIARY

The docket of the Supreme Court is becoming congested. At the opening
term last year it had 592 cases, while this year it had 687 cases. Justice
long delayed is justice refused. Unless the court be given power by preliminary
and summary consideration to determine the importance of cases, and by
disposing of those which are not of public moment reserve its time for
the more extended consideration of the remainder, the congestion of the
docket is likely to increase. It is also desirable that Supreme Court should
have power to improve and reform procedure in suits at law in the Federal
courts through the adoption of appropriate rules. The Judiciary Committee
of the Senate has reported favorably upon two bills providing for these
reforms which should have the immediate favorable consideration of the
Congress.

I further recommend that provision be made for the appointment of a
commission, to consist of two or three members of the Federal judiciary
and as many members of the bar, to examine the present criminal code of
procedure and recommend to the Congress measures which may reform and expedite
court procedure in the administration and enforcement of our criminal laws.

PRISON REFORM

Pending before the Congress is a bill which has already passed one House
providing for a reformatory to which could be committed first offenders
and young men for the purpose of segregating them from contact with banned
criminals and providing them with special training in order to reestablish
in them the power to pursue a law-abiding existence in the social and economic
life of the Nation. This is a matter of so much importance as to warrant
the early attention of the present session. Further provision should also
be made, for a like reason, for a separate reformatory for women.

NATIONAL POLICE BUREAU

Representatives of the International Police Conference will bring to
t e attention of the Congress a proposal for the establishment of a national
police bureau. Such action would provide a central point for gathering,
compiling, and later distributing to local police authorities much information
which would be helpful in the prevention and detection of crime. I believe
this bureau is needed, and I recommend favorable consideration of this
proposal.

DISTRICT OF COLUMBIA WELFARE

The welfare work of the District of Columbia is administered by several
different boards dealing with charities and various correctional efforts.
It would be an improvement if this work were consolidated and placed under
the direction of a single commission.

FRENCH SPOLIATION CLAIMS

During the last session of the Congress legislation was introduced looking
to the payment of the remaining claims generally referred to as the French
spoliation claims. The Congress has provided for the payment of many similar
claims. Those that remain unpaid have been long pending. The beneficiaries
thereunder have every reason to expect payment. These claims have been
examined by the Court of Claims and their validity and amount determined.
The United States ought to pay its debts. I recommend action by the Congress
which will permit of the payment of these remaining claims.

THE WAGE EARNER

Two very important policies have been adopted by this country which,
while extending their benefits also in other directions, have been of the
utmost importance to the wage earners. One of these is the protective tariff,
which enables our people to live according to a better standard and receive
a better rate of compensation than any people, any time, anywhere on earth,
ever enjoyed. This saves the American market for the products of the American
workmen. The other is a policy of more recent origin and seeks to shield
our wage earners from the disastrous competition of a great influx of foreign
peoples. This has been done by the restrictive immigration law. This saves
the American job for the American workmen. I should like to see the administrative
features of this law rendered a little more humane for the purpose of permitting
those already here a greater latitude in securing admission of members
of their own families. But I believe this law in principle is necessary
and sound, and destined to increase greatly the public welfare. We must
maintain our own economic position, we must defend our own national integrity.

It is gratifying to report that the progress of industry, the enormous
increase in individual productivity through labor-saving devices, and the
high rate of wages have all combined to furnish our people in general with
such an abundance not only of the necessaries but of the conveniences of
life that we are by a natural evolution solving our problems of economic
and social justice.

THE NEGRO

These developments have brought about a very remarkable improvement
in the condition of the negro race. Gradually, but surely, with the almost
universal sympathy of those among whom they live, the colored people are
working out their own destiny. I firmly believe that it is better for all
concerned that they should be cheerfully accorded their full constitutional
rights, that they should be protected from all of those impositions to
which, from their position, they naturally fall a prey, especially from
the crime of lynching and that they should receive every encouragement
to become full partakers in all the blessings of our common American citizenship.

CIVIL SERVICE

The merit system has long been recognized as the correct basis for employment
in our, civil service. I believe that first second, and third class postmasters,
and without covering in the present membership tile field force of prohibition
enforcement, should be brought within the classified service by statute
law. Otherwise the Executive order of one administration is changed by
the Executive order of another administration, and little real progress
is made. Whatever its defects, the merit system is certainly to be preferred
to the spoils system.

DEPARTMENTAL REORGANIZATION

One way to save public money would be to pass the pending bill for the
reorganization of the various departments. This project has been pending
for some time, and has had the most careful consideration of experts and
the thorough study of a special congressional committee. This legislation
is vital as a companion piece to the Budget law. Legal authority for a
thorough reorganization of the Federal structure with some latitude of
action to the Executive in the rearrangement of secondary functions would
make for continuing economy in the shift of government activities which
must follow every change in a developing country. Beyond this many of the
independent agencies of the Government must be placed under responsible
Cabinet officials, if we are to have safeguards of efficiency, economy,
and probity.

ARMY AND NAVY

Little has developed in relation to our national defense which needs
special attention. Progress is constantly being made in air navigation
and requires encouragement and development. Army aviators have made a successful
trip around the world, for which I recommend suitable recognition through
provisions for promotion, compensation, and retirement. Under the direction
of the Navy a new Zeppelin has been successfully brought from Europe across
the Atlantic to our own country.

Due to the efficient supervision of the Secretary of War the Army of
the United States has been organized with a small body of Regulars and
a moderate National Guard and Reserve. The defense test of September 12
demonstrated the efficiency of the operating plans. These methods and operations
are well worthy of congressional support.

Under the limitation of armaments treaty a large saving in outlay and
a considerable decrease in maintenance of the Navy has been accomplished.
We should maintain the policy of constantly working toward the full treaty
strength of the Navy. Careful investigation is being made in this department
of the relative importance of aircraft, surface and submarine vessels,
in order that we may not fail to take advantage of all modern improvements
for our national defense. A special commission also is investigating the
problem of petroleum oil for the Navy, considering the best policy to insure
the future supply of fuel oil and prevent the threatened drainage of naval
oil reserves. Legislative action is required to carry on experiments in
oil shale reduction, as large deposits of this type have been set aside
for the use of the Navy.

We have been constantly besought to engage in competitive armaments.
Frequent reports will reach us of the magnitude of the military equipment
of other, nations. We shall do well to be little impressed by such reports
or such actions. Any nation undertaking to maintain a military establishment
with aggressive and imperialistic designs will find itself severely handicapped
in the economic development of the world. I believe thoroughly in the Army
and Navy, in adequate defense and preparation. But I am opposed to any
policy of competition in building and maintaining land or sea armaments.

Our country has definitely relinquished the old standard of dealing
with other countries by terror and force, and is definitely committed to
the new standard of dealing with them through friendship and understanding.
This new policy should be constantly kept in mind by the guiding forces
of the Army and Navy, by the. Congress and by the country at large. I believe
it holds a promise of great benefit to humanity. I shall resist any attempt
to resort to the old methods and the old standards. I am especially solicitous
that foreign nations should comprehend the candor and sincerity with which
we have adopted this position. While we propose to maintain defensive and
supplementary police forces by land and sea, and to train them through
inspections and maneuvers upon appropriate occasions in order to maintain
their efficiency, I wish every other nation to understand that this does
not express any unfriendliness or convey any hostile intent. I want the
armed forces of America to be considered by all peoples not as enemies
but as friends as the contribution which is made by this country for the
maintenance of the peace and security of the world.

VETERANS

With the authorization for general hospitalization of the veterans of
all wars provided during the present year, the care and treatment of those
who have served their country in time of peril and the attitude of the
Government toward them is not now so much one of needed legislation as
one of careful, generous and humane administration. It will ever be recognized
that their welfare is of the first concern and always entitled to the most
solicitous consideration oil the part of their fellow citizens. They are
organized in various associations, of which the chief and most representative
is the American Legion. Through its officers the Legion will present to
the Congress numerous suggestions for legislation. They cover such a wide
variety of subjects that it is impossible to discuss them within the scope
of this message. With many of the proposals I join in hearty approval and
commend them all to the sympathetic investigation and consideration of
the Congress.

FOREIGN RELATIONS

At no period in the past 12 years have our foreign relations been in
such a satisfactory condition as they are at the present time. Our actions
in the recent months have greatly strengthened the American policy of permanent
peace with independence. The attitude which our Government took and maintained
toward an adjustment of European reparations, by pointing out that it wits
not a political but a business problem, has demonstrated its wisdom by
its actual results. We desire to see Europe restored that it may resume
its productivity in the increase of industry and its support in the advance
of civilization. We look with great gratification at the hopeful prospect
of recuperation in Europe through the Dawes plan. Such assistance as can
be given through the action of the public authorities and of our private
citizens, through friendly counsel and cooperation, and through economic
and financial support, not for any warlike effort but for reproductive
enterprise, not to provide means for unsound government financing but to
establish sound business administration ' should be unhesitatingly provided.

Ultimately nations, like individuals, can not depend upon each other
but must depend upon themselves. Each one must work out its own salvation.
We have every desire to help. But with all our resources we are powerless
to save unless our efforts meet with a constructive response. The situation
in our own country and all over the world is one Chat can be improved only
by bard work and self-denial. It is necessary to reduce expenditures, increase
savings and liquidate debts. It is in this direction that there lies the
greatest hope of domestic tranquility and international peace. Our own
country ought to finish the leading example in this effort. Our past adherence
to this policy, our constant refusal to maintain a military establishment
that could be thought to menace the security of others, our honorable dealings
with other nations whether great or small, has left us in the almost constant
enjoyment of peace.

It is not necessary to stress the general desire of all the people of
this country for the promotion of peace. It is the leading principle of
all our foreign relations. We have on every occasion tried to cooperate
to this end in all ways that were consistent with our proper independence
and our traditional policies. It will be my constant effort to maintain
these principles, and to reinforce them by all appropriate agreements and
treaties. While we desire always to cooperate and to help, we are equally
determined to be independent and free. Right and truth and justice and
humanitarian efforts will have the moral support of this country all over
the world. But we do not wish to become involved in the political controversies
of others. Nor is the country disposed to become a member of the League
of Nations or to assume the obligations imposed by its covenant.

INTERNATIONAL COURT

America has been one of the foremost nations in advocating tribunals
for the settlement of international disputes of a justiciable character.
Our representatives took a leading in those conferences which resulted
in the establishment of e ague Tribunal, and later in providing for a Permanent
Court of International Justice. I believe it would be for the advantage
of this country and helpful to the stability of other nations for us to
adhere to the protocol establishing, that court upon the conditions stated
in the recommendation which is now before the Senate, and further that
our country shall not be bound by advisory opinions which may be, rendered
by the court upon questions which we have not voluntarily submitted for
its judgment. This court would provide a practical and convenient tribunal
before which we could go voluntarily, but to which we could not be summoned,
for a determination of justiciable questions when they fail to be resolved
by diplomatic negotiations.

DISARMAMENT CONFERENCE

Many times I have expressed my desire to see the work of the Washington
Conference on Limitation of Armaments appropriately supplemented by further
agreements for a further reduction M for the purpose of diminishing the
menace and waste of the competition in preparing instruments of international
war. It has been and is my expectation that we might hopefully approach
other great powers for further conference on this subject as soon as the
carrying out of the present reparation plan as the established and settled
policy of Europe has created a favorable opportunity. But on account of
proposals which have already been made by other governments for a European
conference, it will be necessary to wait to see what the outcome of their
actions may be. I should not wish to propose or have representatives attend
a conference which would contemplate commitments opposed to the freedom
of action we desire to maintain unimpaired with respect to our purely domestic
policies.

INTERNATIONAL LAW

Our country should also support efforts which are being made toward
the codification of international law. We can look more hopefully, in the
first instance, for research and studies that are likely to be productive
of results, to a cooperation among representatives of the bar and members
of international law institutes and societies, than to a conference of
those who are technically representative of their respective governments,
although, when projects have been developed, they must go to the governments
for their approval. These expert professional studies are going on in certain
quarters and should have our constant encouragement and approval.

OUTLAW OF WAR

Much interest has of late been manifested in this country in the discussion
of various proposals to outlaw aggressive war. I look with great sympathy
upon the examination of this subject. It is in harmony with the traditional
policy of our country, which is against aggressive war and for the maintenance
of permanent and honorable peace. While, as I have said, we must safeguard
our liberty to deal according to our own judgment with our domestic policies,
we can not fail to view with sympathetic interest all progress to this
desired end or carefully to study the measures that may be proposed to
attain it.

LATIN AMERICA

While we are desirous of promoting peace in every quarter of the globe,
we have a special interest in the peace of this hemisphere. It is our constant
desire that all causes of dispute in this area may be tranquilly and satisfactorily
adjusted. Along with our desire for peace is the earnest hope for the increased
prosperity of our sister republics of Latin America, and our constant purpose
to promote cooperation with them which may be mutually beneficial and always
inspired by the most cordial friendships.

FOREIGN DEBTS

About $12,000,000,000 is due to our Government from abroad, mostly from
European Governments. Great Britain, Finland, Hungary, Lithuania and Poland
have negotiated settlements amounting close to $5,000,000,000. This represents
the funding of over 42 per cent of the debt since the creation of the special
Foreign Debt Commission. As the life of this commission is about to expire,
its term should be extended. I am opposed to the cancellation of these
debts and believe it for the best welfare of the world that they should
be liquidated and paid as fast as possible. I do not favor oppressive measures,
but unless money that is borrowed is repaid credit can not be secured in
time of necessity, and there exists besides a moral obligation which our
country can not ignore and no other country can evade. Terms and conditions
may have to conform to differences in the financial abilities of the countries
concerned, but the principle that each country should meet its obligation
admits of no differences and is of universal application.

It is axiomatic that our country can not stand still. It would seem
to be perfectly plain from recent events that it is determined to go forward.
But it wants no pretenses, it wants no vagaries. It is determined to advance
in an orderly, sound and common-sense way. It does not propose to abandon
the theory of the Declaration that the people have inalienable rights which
no majority and no power of government can destroy. It does not propose
to abandon the practice of the Constitution that provides for the protection
of these rights. It believes that within these limitations, which are imposed
not by the fiat of man but by the law of the Creator, self-government is
just and wise. It is convinced that it will be impossible for the people
to provide their own government unless they continue to own their own property.

These are the very foundations of America. On them has been erected
a Government of freedom and equality, of justice and mercy, of education
and charity. Living under it and supporting it the people have come into
great possessions on the material and spiritual sides of life. I want to
continue in this direction. I know that the Congress shares with me that
desire. I want our institutions to be more and more expressive of these
principles. I want the people of all the earth to see in the American flag
the symbol of a Government which intends no oppression at home and no aggression
abroad, which in the spirit of a common brotherhood provides assistance
in time of distress.